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IP Inferno
advanced IP applications are the fire burning down traditional telecom

  • The Game is Fixed
    If AT&T was a blackjack dealer, it would deal two cards to each player and then turn the rest of the cards over and select the best remaining cards for itself. This is more or less how it works right now for alternative network access vendors like Covad. There is the occasional "blackjack!" for Covad when working to install a bonded T1 or other wired Internet connection for its customers. But as often as not AT&T is one step ahead -- in my case for example, there was "insufficient equipment" available to provide a bonded T1 (I was participating in a blogger evaluation program run by Comunicano for Covad).

    The United States now lags the rest of the developed world in access speeds for Internet connectivity. Instead of spurring competition, the Bush administration has overseen a re-assembly of the AT&T monopoly ("hey, didn't we already destroy the deathstar? Do we have to do it again?"). And to make matters worse, now just by complaining about AT&T, they can terminate my service.

    Anytime a company starts operating like a power-drunk sovereign, its a good sign that competitive balances are out of whack. I for one am hoping that Covad can build up their fixed wireless network as an alternative to the copper wire monopoly our government has granted to AT&T. Not that this will help me, my house is in a canyon without a line-of-sight to Covad's POP in Oakland.

    I guess I better fall on my knees now and ask forgiveness of AT&T -- please, please don't cut me off!

  • Broadband Data Improvement (S.1492)
    Ah, the boring but important department. What is your government doing for you? Passing pork barrel funding for rural telcos and failing to demand better data connectivity from the protected telecom monopolies that they have created... What, you ask, is this 1984?

    Back to the future! The breakup of Ma-bell has all but been reversed. We now have two telephone companies in this country - Verizon and AT&T. And since they operate in non-overlapping markets, the effect is that consumers of telecommunications services are forced to deal with a monopoly.

    Which is partly why "broadband" continues to be defined as 200K by the FCC. The best interests of the telecom operators are served by making as much money as possible from the existing physical plan investments before upgrading.

    Sadly, this is not being challenged by the US Senate in their so-called "Broadband Data Improvement Act" (S.1492). Our old favorite Dan Inouye (D-HI) who has done such a great job of bringing millions of Federal dollars to his state to improve data connectivity for a handful of houses is behind this new bill.

    But what will be done to create incentives for the monopolists to have our country remain competitive with the rest of the world in broadband connectivity? Apparently very little (if anything). Here is what S.1492 promises:

    • Direct the Federal Communications Commission (FCC) to reevaluate its current 200 kilobit broadband standard. It also would require the FCC to create a new metric known as "second generation broadband" to be used to reflect network connections capable of reliably transmitting high-definition video content.

    • Direct broadband providers to report broadband availability and second generation broadband connections within 9-digit zip code areas.

    • Direct the FCC to conduct inquiries into the deployment of advanced telecommunications services on an annual, rather than periodic, basis.

    • Direct the Census Bureau to include a question in its American Community Survey that assesses levels of residential computer use and dial-up versus broadband Internet subscribership.

    • Direct the Government Accountability Office (GAO) to develop broadband metrics that may be used to provide consumers with broadband connection cost and capability information and improve the process of comparing the deployment and penetration of broadband in the United States with other countries.

    • Direct the Small Business Administration's Office of Advocacy to conduct a study evaluating the impact of broadband speed and price on small businesses.

    • Authorize a 5-year, $40 million per year program that would provide matching grants to State non-profit, public-private partnerships in support of efforts to more accurately identify barriers to broadband adoption throughout the State.

    In other words, the bill would direct the FCC to study the question of what it means for us to remain competitive with the rest of the world while throwing a little money ($40 million) to states to give money to... who? Private companies that are "identifying barriers to broadband adoption?" If it squeals like a pig, it is probably pork.

  • FCC and Inter-Carrier Compensation
    In my mailbox this morning, some interesting thoughts on recent FCC rulings from the good folks at Womble Carlyle Sandridge and Rice...

    Here is a direct copy paste from their email:

    1. Asymmetrical Intercarrier Compensation. Wholesale carriers (and not their customers) are obligated to pay intercarrier compensation to incumbent LECs. The FCC makes no mention of any incumbent LEC obligation to compensate wholesale carriers for traffic termination. The FCC expressly punted on addressing intercarrier compensation for VoIP traffic under
    section 251(b)(5).

    2. Limited Interconnection Rights. Although the order establishes an interconnection requirement under section 251(a), no interconnection finding is made under section 251(c). Under 251(c), competitors are entitled to interconnection: (i) at any technically feasible point; (ii) on terms and conditions that are just, reasonable and nondiscriminatory; and (iii) at cost-based rates. 251(a) interconnection ? provided for in the order ? contains none of these safeguards. Expect special access pricing and terms.

    3. Broad Definition of Wholesale. The FCC clarified that the statutory classification of a wholesaler?s customer ? as either an ?information service? or ?telecommunication service? ? is irrelevant to a wholesaler?s ability to interconnect with a LEC under sections 251(a) and (b).

    4. Action on Delegated Authority. Because the Bureau acted on delegated authority, parties may not appeal any aspect of the order directly to circuit court. Rather, parties must file either (but not both) an ?application for review? or a ?petition for reconsideration.? An application for review would put matters before the full Commission. A petition for reconsideration would go to the Bureau, which may refer such a petition to the full Commission.

  • eTel Blogger Dinner
    Thanks to Andy Abramson for a fun time last night at Roti Indian Bistro. 30 something bloggers, media folks, and a few company execs showed up to enjoy good conversation and good food.

  • Redknee public on AIM
    Redknee has NO offices in the United States. Really. Look here at their info page. And now they have chosen to go public on the Alternative Investment Market (AIM) of the London Stock Exchange.

    While liquidity is not as good on the AIM as on NASDAQ, it is easy to understand why Redknee (AIM : RKN) would make this decision in just two words -- Sarbannes Oxley. As ThinkBlog points out:
    SOX compliance can easily cost $2 million for a small, emerging growth company.
    I think that number is on the low side. When I was an executive officer at Borland we estimated that Sarbannes Oxley was costing us $1 million per quarter when you took into account lost time from employees and executives due to compliance issues.

    ThinkBlog explains a few more of the benefits:

    Besides escaping SOX and other choking US regulations, AIM gives listing companies other benefits as well. In general, it takes 12-16 weeks to get listed on AIM as opposed to the typical 4-6 months in the US. Listing fees are 1/3 or less of what they are on the NYSE or NASDAQ.

    Reporting requirements are 2x a year as opposed to 4x, and shareholders aren't required to approve most actions.

    I suspect we will be seeing a lot more companies choosing AIM over NASDAQ... and maybe avoiding a US office altogether. At least until we can recover from the abuses of the few and reinstate rational business practices here in the Stats.


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